Congress Investigating Influence of Cryptocurrencies on Elections
The summer season is warming up fast, and cryptocurrency is feeling the heat. More potential government pushback against cryptocurrency could be on the cards this Tuesday, June 26th, as the U.S. Senate is set to discuss the influence cryptocurrency may be having on political elections.
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The Federal Election Commission Doesn’t Want Corrupting Influences in American Elections
Bitcoin was first approved by the Federal Election Commission (FEC) back in May of 2014 as an acceptable form of currency for campaign financing in federal elections, with the caveat that all bitcoin must be converted to USD prior to being spent.
Now four years later, this issue will be re-examined, not long after foreign influence in the 2016 presidential election was thoroughly investigated. Whether or not any overlap in discussion will occur is yet to be determined.
Scrutiny on the Rise
The number of U.S. federal agencies looking into the illicit use of cryptocurrency continues to grow, adding to a list that includes the Department of Justice, the Commodity Futures Trading Commission (CFTC), and the Secret Service.
Earlier this week, U.S. Senate candidate Austin Petersen made news when he was forced to return a $130,000 USD bitcoin contribution because it exceeding the FEC-sanctioned maximum. Also this week, the Oregon Secretary of State proposed allowing cryptocurrency donations in state elections. Similar discussions began in Colorado the week prior.
Titled “Protecting Our Elections: Examining Shell Companies and Virtual Currencies as Avenues for Foreign Interference”, the hearing will be held by the Subcommittee on Crime and Terrorism, leaving little doubt that the negative aspects of this type of financing will be thoroughly explored.
However, positive discussions certainly cannot be ruled out; a February hearing this year with the Senate and CFTC yielded some surprisingly positive discourse about cryptocurrency, which consequently resulted in an overall market uptick. The presiding head of the committee is Senator Lindsay Graham (R) of South Carolina.
Past Use of Cryptocurrency in U.S. Elections
Andrew Hemingway made history in 2014 as the first U.S. political candidate to accept bitcoin in his unsuccessful run for Governor of New Hampshire. Later that year, House of Representatives member Jared Polis (D) became the first candidate in a federal election to accept bitcoin in a bid for re-election, in which he was victorious.
He has since become a longstanding advocate of cryptocurrency; late last year he worked to defend consumers when the IRS infamously made a sweeping demand of tax information for all Coinbase users. A compromise was eventually reached where data for “only” 13,000 users had to be turned over.
Perhaps the most high profile candidate came in the 2016 presidential election when candidate Rand Paul, whose father Ron Paul also voiced support for cryptocurrency, began accepting bitcoin contributions. This received some scrutiny from the press, largely due to misunderstandings about the traceability of the currency, which is arguably even more traceable than traditional fiat with the development and advancement of chainalysis technology.
Seeing the Positives
The beneficial uses of cryptocurrency are certainly worthy of consideration. In addition to the aforementioned issue of traceability, blockchain itself has proven its utility in voting tabulation. Though it was falsely reported that Sierra Leone held a blockchain-based election earlier this year, the concept was indeed successfully tested on a small scale in a West Virginia primary vote. As this write-up from the Brookings Institute explains, verifying electoral results legitimately, while protecting voter anonymity, proved to be fairly simple and very reliable:
“Each vote forms part of a chain of votes, where it is mathematically proven by the third party participant. Using blockchain, all data of the election process can be recorded on a publicly verifiable ledger while maintaining the anonymity of voters, with results available instantly.”
Voter fraud has long been a subject of controversy in elections. Many cases have even gone to court and brought the legitimacy of victorious candidates into question. An improved solution to the voting process could be a solid step towards instilling trust in elections, in addition to increasing the overall efficiency of the electoral process.
Have your say. What will Lindsay Graham’s committee have to say about crypto in politics?
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